Educational Forum – The Good, The Bad, and The Ugly of Risk Management
As the California JPIA’s Risk Management Educational Forum is fast approaching, it is only appropriate to be reminded of the key role our strategic partners play. Annually, the Forum’s success is significantly owed to the overwhelming support of those partners that contribute financially toward the Forum’s program and activities.
The Authority has always considered its business partners to be of strategic importance. This is not only true with respect to how they jointly work with members in managing risk. It applies as well regarding their partnership in helping us achieve a truly exceptional educational experience for our members.
We deeply appreciate our strategic partners and the part they play in supporting this opportunity for members.
Alliant Insurance Services Inc.
AmWINS Insurance Brokerage of California, LLC
Brit Global Specialty USA
Burke, Williams & Sorensen, LLP
Carl Warren & Company
Markel Global Reinsurance
Kessel & Megrabyan
Kutak Rock LLP
Wesierski & Zurek, LLP
El Capitan Level
Declues, Burkett & Thompson, APC
Disability Access Consultants
Law Offices of Haith Bagnaschi, LLP
McCormick, Mitchell & Rasmussen, APC
Poms & Associates Risk Services
Siegel, Moreno & Stettler, APC
USI Insurance Services
Arthur J. Gallagher & Co.
Arrowhead General Insurance Agency, Inc.
PFM Asset Management LLC
Public Sector Excellence
Risk Placement Services, Insurance Brokers
Adamski Moroski Madden Cumberland & Green LLP
Aleshire & Wynder, LLP
CD Photocopy Service, Inc.
Collins Collins Muir + Stewart, LLP
Goldman, Magdalin & Krikes LLP
Harbor Health Systems
Law Offices of Barber & Bauermeister
Law Offices of S. Henslee Smith
Pollak, Vida & Barer
Procter, Shyer & Winter, LLP
California JPIA Receives Accreditation with Excellence
The California JPIA has been awarded Accreditation with Excellence by the California Association of Joint Powers Authorities (CAJPA) for a three-year term from 2019-2022.
Created in 1981, CAJPA is a statewide association for insurance-based risk sharing pools that provides continuing education, legislative advocacy, and active involvement in regulatory matters on behalf of its joint powers authority members. CAJPA is California’s leading voice for pools, risk management, and JPA’s.
CAJPA sponsors the nation’s first risk management accreditation program. The program, established in 1988, forms a set of professional standards which serve as a guideline for all risk management pools regardless of size, scope of operation, or membership structure.
“An accreditation, particularly an Accreditation with Excellence provides confidence to our members, in that there has been an external examination into our pool’s legal, contract and operational documents, risk management practices, loss control and claims program, and ensured that we are meeting statutory compliance,” said Chief Executive Officer Jon Shull. “We are proud to have been awarded CAJPA’s highest recognition, Accreditation with Excellence, a title which is reserved for those JPA’s who exceed the mandatory requirements for accreditation.”
“To put this recognition in context,” said the Authority’s Business Projects Manager Carl Sandstrom, who serves on CAJPA’s technology and accreditation committees, “there are about 135 risk-sharing pools in California. Of those, about 100 are members of CAJPA and of those, about 60 have achieved CAJPA’s rigorous accreditation.”
The factors on which the CAJPA accreditation is based are comprehensive: more than 30 pages of standards encompassing governance, operations, claims management, finance, and accounting. The foundation of the accreditation program is:
- To promote professional management and fiscally sound practices
- To provide industry standards that can be used in evaluating levels of performance and compliance
- To develop a self-regulating process thorough, responsive and cost effective
- To assist managers in achieving and assure governing boards of meeting high standards
- To provide an opportunity to compare certain policies and procedures to the accreditation standards and other pools in the industry
“The accreditation process was created, and continues to be cultivated, to ensure the long-term health of the risk-sharing pool industry,” said Sandstrom. “By formalizing a self-regulating program through accreditation, members of pools benefit from higher operating standards and financial controls. It is CAJPA’s answer to the question: “Who can help us ensure our JPA is being operated in the best way possible?”
More information on CAJPA and its accreditation program can be found at www.cajpa.org.
Photo caption: President Curtis Morris, Kimberly Dennis representing CAJPA, and Chief Executive Officer Jon Shull.
The League of California Cities: Preserving Self Governance
The League of California Cities (League) helps city officials and staff make informed, honest, and open decisions to improve their communities. Through the League, California’s 482 cities gain opportunities to enhance their knowledge and skills, exchange innovative ideas, and pool resources to serve their constituents.
“Like the League, the Authority values the education and support of municipal leaders and elected officials collaborating to improve California’s cities,” said Chief Executive Officer Jon Shull. “By supporting the League, we are investing in the education and enrichment of decision-makers and advancing local priorities at city halls throughout the state.”
The Authority supports the League through its League Partner program. Having been a League of California Cities Platinum Partner since 2016, the League Partner program connects California’s businesses, nonprofit associations, labor communities, and other organizations with local government leaders across the state. The program provides a unique opportunity for dialogue and participation between League Partners and local decision-makers. League Partners are connected to a wide variety of critical issues in local government across California and to the key decision-makers involved.
Earlier this year, Authority team members Assistant Executive Officer Norm Lefmann, Chief Financial Officer Alex Smith, Administrative Analyst Abe Han, and Workers’ Compensation Program Manager Jeff Rush networked with local officials and addressed priority issues at the League’s Legislative Action Day, April 24, 2019, at the Capitol Event Center and State Capitol in Sacramento.
The Authority will continue to forge partnerships and discuss risk management best practices with Authority members, business partners, and prospective members at the League’s Annual Conference, October 16-18, 2019, in Long Beach.
“The California Joint Powers Insurance Authority’s dedication to the art of honest, ethical public service makes it an instrumental partner to the League,” said League of California Cities Public Affairs Director Bismarck Obando. “Further, its programs and services complement the League’s, helping elected officials and staff to make smart choices and build strong partnerships.”
For more information about the League of California Cities, visit www.cacities.org.
The California JPIA’s annual Workers’ Compensation Symposium and Liability Attorney Summit provide opportunities for Authority members, counsel, and staff to learn about a wide range of subjects and cases vital to understanding how to manage risk and reduce liability.
“With front-row access to industry experts and current content,” said Assistant Executive Officer Norm Lefmann, “these two programs offer not only an experiential boost in understanding the nuances of workers’ compensation and risk management but also an insight into the ever-evolving landscape of risk management.”
The 11th Annual Workers’ Compensation Symposium, held August 15 on the Authority’s campus in La Palma, provided an opportunity for member agency risk managers and human resource professionals to learn about emerging issues relevant to their agency’s workers’ compensation program. Members also met with panel attorneys and claims team representatives from the Authority’s third-party administrator, Sedgwick (formerly York Risk Services), to gather insights unique to their agencies.
In addition to a legislative update and an overview of the Authority’s claim data, this year’s curriculum addressed public safety presumption claims, telehealth, and employment law.
Two weeks later, on August 28, the Authority’s campus hosted the Liability Attorney Summit, an event that was exclusive to the Authority’s defense panel attorneys and representatives from the Authority’s third-party administrator, Carl Warren & Company. Summit participants gathered to learn about and discuss emerging case law, litigation strategies, and liability claims trends. This year’s Summit agenda included the following topics:
- Liability Program Update
- Best Practices for Tenders of Defense and Indemnification
- Trends in the California Court Reporting Industry
- California JPIA Employment Liability Insurance Case Update
- Appellate Update
“The Summit provides an opportunity for the defense counsel panel to share individual experiences and discuss legal trends and liability claim strategies with other panel attorneys. In doing so, the defense counsel panel is able to provide the Members with the most informed defenses on liability cases,” said Chief Executive Officer Jon Shull.
By Jeff Rush, Workers’ Compensation Program Manager
York Risk Services Group, the third-party administrator for the Authority’s Primary and Excess Workers’ Compensation Programs, was recently acquired by Sedgwick Claims Management Services. Sedgwick is a leading global provider of technology-enabled risk, benefits, and integrated business solutions.
The transition from the York name to Sedgwick is underway. For those that receive e-mails from the York claims team, these e-mails now reflect the Sedgwick logo. Additional rebranding is expecting in the months to come. Sedgwick has a total workforce of over 27,000 employees worldwide and also serves as the claims administrator for the Authority’s Property Program.
There are no staffing changes to the dedicated claims team, which works exclusively on behalf of the Authority and its members.
If you have any questions, please contact Jeff Rush, Workers’ Compensation Program Manager.
City of La Cañada Flintridge Leverages Trail Immunity
The City of La Cañada Flintridge, nestled in the Crescenta Valley between the San Gabriel Mountains and Angeles National Forest to the north and the San Rafael Hills to the south, offers myriad recreational opportunities for its approximately 20,000 residents. The community, whose total area is less than nine square miles, boasts 23 miles of hiking and horse trails, which are open and accessible to the public.
Trail Immunity (CA Govt. Code Section 831.4) protects public entities from liability for injuries caused by a condition of a recreational trail. Applying to both paved and unpaved or natural trails, the immunity is intended to motivate municipalities to permit recreational use of their property.
“Trail Immunity allows local governments to plan and provide recreational trail opportunities for the benefit of their citizens while taking away the fear of being liable for accidents or injuries that might occur on a trail,” says La Cañada Flintridge City Manager Mark Alexander. “Without this immunity, municipalities may be fearful of providing such recreational opportunities, so the public policy reasons for having the immunity are important to helping improve the quality of life for residents.”
The city considers its trails to be one of the most significant assets of the community for both recreational and healthy living purposes, and invests a significant amount of resources in developing, preserving, promoting, and maintaining its network of trails, which also are linked with the Los Angeles County trails system.
“Because of the sheer number of trails that we and the county provide, the risk exposure to liability is high. Because of heavy usage as well as changing conditions, the risk of erosion, degradation, or alteration is also high,” continues Alexander. “Trail Immunity is important to us because it allows us to maintain and provide trails, both existing and new, without the fear of heightened liability should an accident or injury occur. We wouldn’t have this fantastic trail network without Trail Immunity.”
Many community events and programs, such as the annual Mayor’s Hike and the County Supervisor’s trail ride, take place on the trails. The city also hosts trail restoration events, that offer residents opportunities to work on trails by restoring sections that may have deteriorated or placing signage to remind users to stay on the trail, and works with local Eagle Scout and Gold Scout aspirants on projects that benefit their service goals, the trails, and the community at large.
The city is supported in its efforts by the La Cañada Flintridge Trails Council, a nonprofit, volunteer organization that takes on the roles of informant, collaborator, and ambassador. First and foremost, the Trails Council serves as an informant of trail conditions, alerting staff to trail-related issues so that they may be resolved promptly. Real-time reporting typically is generated through the Trails Council’s “Suggest Trail Repair” interactive web-based form. Having an active reporting system in place allows the city to reduce the dangers or hazards to which users may be exposed. Staff also looks to the Trails Council for guidance on improvements, policy development, and usage protocols. Beyond the day-to-day maintenance needs, the Trails Council provides long term strategies to anticipate where the trails need improvement, where policies need to be developed to keep users safe, and where policies may be necessary on how the trails are being used. As ambassador of the trails, the Trails Council website provides the public an informative platform showcasing trail routes and keeps user groups informed of closures, events, and other issues. The Trails Council also maintains the official trails map.
During his 16-year tenure as city manager, Alexander has observed how technology has enabled users to become more connected and aware of the city’s trails. At the center of this awareness, he says, is an app developed by the Trails Council that allows users to not only pinpoint their exact location and more safely and accurately navigate the trails, but also directly report issues that they come across on their hikes.
The City of La Cañada Flintridge has been a member of the California JPIA since 1986. Alexander, who joined the city staff two years later in 1988, describes the Authority as a self-insurance pool of common-interest cities and public agencies working together to manage their risks and claims. But, he observes, the Authority is more than an insurance pool because its programs, conferences, trainings, and template policies help ensure that members are all practicing accepted best management efforts as they deal with risk and liability exposure.
“The Authority’s greatest value is its knowledge, experience, and expertise,” says Alexander. “The Authority has dealt with practically every type of liability out there and they have a successful track record. They have an excellent training program to impart lessons learned from prior circumstances and cases. They have an excellent panel of attorneys that are well experienced in how to successfully defend in litigation and protect municipalities and their officers. Their training and educational seminars are second-to-none in helping members understand what they could be doing to better manage risk and liability exposure.”
Photo Caption: Paddy Taber, Senior Management Analyst – Public Works, and City Manager Mark Alexander
Where the Wildflowers Grow: The Super Bloom of Lake Elsinore
This spring, the City of Lake Elsinore experienced an extraordinary natural phenomenon: Extended drought conditions followed by record rainfall produced a massive bloom of California wildflowers known as the 2019 Super Bloom in Walker Canyon.
The once-in-a-lifetime Super Bloom blanketed Lake Elsinore mountainsides and canyons with an abundance of orange California poppies. Attracting up to 100,000 daily visitors from all over the world, the Super Bloom wonder demonstrated the extreme beauty of Lake Elsinore. “It was crazy,” said the city’s finance manager, Shannon Buckley. “Visitors came from all over the United States, as well as Europe and Asia. People were getting off the bus and showing us their passports from countries as far as China, Hong Kong, and Thailand. Even a few celebrities showed up.”
When the unplanned tourist attraction also generated public safety issues for the City of Lake Elsinore, the California JPIA was available to provide support. “The challenge was a large inundation of visitors in order to view the Super Bloom of wildflowers,” said the city’s designated Risk Manager, Alex Mellor. “This had a huge impact on the city, as well as local business and property owners, in the form of people trespassing, parking where they shouldn’t, getting into traffic accidents, and overestimating their physical ability to make the hike to view the wildflowers, trampling on the flowers.”
The city and its partners responded to this unplanned, natural phenomenon by putting public safety first. City, county, transportation, and public safety personnel worked together to create a unified approach to address the increasing public safety challenges related to the Super Bloom. This included increasing available resources and support, implementing additional traffic control measures, increased enforcement, expanded public notices, and the use of shuttle services to transport visitors to the trailhead where they could experience the Super Bloom.
The overall goal of these efforts was to ensure the safety of those visiting Walker Canyon while also reducing traffic impacts and safety concerns from residents. Buckley oversaw the entire operation, which began with the establishment of an Incident Command Post. Buckley designated staff to operate key positions throughout the process and to mitigate problems as they arose.
“We took steps to address the public safety issues, such as designating parking and walking areas, and developed a map for the residents to be able to get out of their homes,” said Buckley.
Although not without its challenges, the Super Bloom provided positive, worldwide visibility of the City of Lake Elsinore. With the help of the Authority and other public agencies, the city was able to manage the situation and mitigate some of the more severe issues.
“The first weekend,” said Buckley. “the Authority reached out and said, ‘How can we help?’ ‘Whatever you need, whatever resources that we can provide, please let us know.’ It was awesome.”
While it’s impossible to be fully prepared for unexpected events like the Super Bloom, practicing sound risk management and establishing strong relationships with organizations like the California JPIA can be critical to helping public agencies address unanticipated emergencies.
Protect Your Agency Via Facility Use Agreements
By Maria Galvan, Risk Manager
Many members rent out facilities, including community centers, for external parties’ meetings, celebrations, recreational activities, and other events. If someone from the external party gets injured on the premises, the member can be held liable as the property owner. Potential liability can be minimized through a facility use agreement (FUA). FUA’s should be executed any time a third-party uses a member’s facilities.
FUA’s outline the renter’s responsibilities, conditions, and rules of use for the facility. A FUA should include indemnity language in favor of the member. The indemnity language should require the facility user to release the member from liability for injuries to any person or persons, or damage to property arising at any time during and/or arising out of or in any way connected with the use or occupancy of the facility and adjoining property. Insurance requirements are also necessary. Without insurance, there is no guarantee that the facility user will be able to financially meet the indemnity obligations outlined in the agreement. The California JPIA recommends requiring insurance for all facility rentals. Many members require evidence of insurance for all facility rentals, while some members choose to only require insurance for rentals where there are a certain number in attendance (ex: 100+ attendees). Although the risk of loss for a smaller group meeting may not be considered, the potential for loss does exist. There are other members that make exceptions to insurance requirements for certain groups (ex: local non-profits). The California JPIA recommends consistency in FUA insurance requirements, to ensure that members do not encounter allegations of preferential treatment of certain groups over others.
A risk analysis should be conducted to determine appropriate coverage. At a minimum, members should require general liability insurance with limits of $1 million per occurrence/$2 million general aggregate, including an endorsement to the policy naming the member as an additional insured. Based on the risks associated with the facility rental, higher general liability limits or additional insurance coverage may be required. In order to verify coverage, it is necessary to obtain the evidence of insurance and additional insured endorsement prior to the facility rental date, otherwise members are exposing themselves to liability for the facility rental’s activities, which members may have little or no control over.
The Alliant Special Events Program is available for members to use and assist facility users with purchasing required insurance. Members administer the program, accept funds, issue certificates of insurance, and file quarterly reports with Alliant Insurance Services. General liability coverage with limits of $1,000,000 per occurrence/$2,000,000 general aggregate is available. Optional coverage available for an additional premium includes limit increases of $1,000,000/$3,000,000 or $2,000,000/$2,000,000, property damage coverage with limits of $50,000 or $100,000, and liquor liability. Certificates are issued with the user of the facility as the Named Insured and the member as Additional Insured. The program has paid several claims. An example is a claim of a guest at a wedding reception that slipped on a spilled a drink while on the dance floor. The claimant suffered a severe knee injury which required several surgeries. Medical bills totaled $125,000. For questions on the special events program, contact Penny Dewitt-Holdren at (949) 660-8142 or email@example.com.
Members also enter into agreements to use the facilities of others. A few years ago, the primary liability program experienced a loss related to the use of a school district facility by a member. The incident occurred at an auditorium. The plaintiff was enrolled in the member’s preschool program and was at the location for a performance. While walking on a riser and set of stairs adjacent to a stage, the plaintiff fell and struck her head, allegedly sustaining a brain injury. The orchestra area below was not blocked off due to a missing piece of the stage. The member had used the school district auditorium for several years and never had a problem with children falling in the past or with the stage. Liability for the accident was apportioned between the member and school district. Initially, the school district vehemently opposed the apportionment. The member and school district had a FUA in place in the past, but it was not in effect during this incident. The lack of an agreement appears to have been an oversight. The member settlement for this loss was $350,000.
Members should ensure that written agreements are in place for all facility uses and that agreements do not lapse. Handshake or verbal agreements will not hold up in court, and disagreements over responsibility and coverage can erode previously long-standing relationships. A FUA template and Contractual Risk Transfer Manual are available on the California JPIA website. Members are advised to work with their legal counsel when drafting facility use agreements or signing another party’s agreement, in addition to consulting with their assigned risk manager.